Madawaska Kmart to close by year's end as parent Sears restructures

by Staff

A Kmart store in Madawaska is among 142 unprofitable stores nationwide due to be closed by Sears Holdings Corp. (NASDAQ: SLHD), the Hoffmann, Ill.-based retailer that just filed for Chapter 11 bankruptcy.

The store, at 417 Main St., was the only one in Maine on the latest closure list and among only two in New England, along with a Sears in Natick, Mass. It is expected to close by year's end.

Sears said that liquidation sales at the 142 Kmart and Sears stores are expected to begin shortly; they come on top of the previously announced closure of 46 unprofitable stores expected to be completed by next month.

The store closures were announced on the same day that Sears said was filing for Chapter 11 and that it has received commitments for $300 million in debt financing while negotiating for another $300 million with ESL Investments Inc, its largest shareholder and creditor.

Sears also announced that Edward S. Lampert has stepped down as CEO, though he will stay on as board chairman.

As the company goes through restructuring, a newly created office of the CEO will manage day-to-day operations. The board has also formed a special restructuring committee to observe that process and have decision-making authority on transactions involving affiliated parties.

"Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debt holders, and be better positioned to execute on our strategy and key priorities," Lampert said in a statement.

He added that "as we look toward the holiday season, Sears and Kmart stores remain open for business.

The company aims to reorganize around a smaller store platform of EBITDA positive store, and said it's in talks with investor ESL regarding a stalking-horse bid for the purchase of a "large portion" of stores.

It also said expects to market and sell certain unspecified assets in coming months.